By: Richard L. Smith
A Bloomfield woman admitted her role in fraudulently inducing victims to invest over $25 million in cash and cryptocurrency, U.S. Attorney Philip R. Sellinger announced.
Federal officials said Ms. Edith Pardo, 70, of pleaded guilty before U.S. District Judge Stanley R. Chesler, to an indictment charging her with one count of conspiring to commit wire fraud, three counts of wire fraud, and one count of securities fraud in connection with a blockchain technology company.
According to documents filed in this case and statements made in court:
Through CG Blockchain Inc. and BCT Inc., Pardo and her co-defendant, Boaz Manor, touted a product called ComplianceGuard, which purportedly provided hedge funds with a blockchain-based auditing tool.
Before starting these entities, Manor was convicted and served a prison sentence in Canada for crimes stemming from his previous role as a hedge fund manager.
While raising money for these new entities, Pardo helped Manor – who changed his appearance and used aliases – hide his true identity and criminal past from investors.
Pardo acted as the face of the entities and, with Manor, told prospective investors that Pardo was independently wealthy and provided millions of dollars in seed money, when in fact, she was neither wealthy nor an investor.
Pardo and Manor also falsely claimed that: Pardo was the sole owner of the entities; “Shaun MacDonald” (one of Manor’s aliases) was merely a consultant; a team of well-credentialed executives ran the entities; and multiple hedge funds were paying millions of dollars in fees to use ComplianceGuard.
In reality, the entities had no real executives, collected no fees, and ComplianceGuard was barely distributed or used.
In 2017, Pardo and Manor relied on many of the same misrepresentations to raise over $25 million through an initial coin offering, or ICO, for a new product called Blockchain Terminal that purportedly allowed hedge funds and financial institutions to trade and manage cryptocurrency.
But after investors began to learn about Manor’s true identity and criminal past, Manor admitted to hiding this information to avoid destroying his new companies.
Manor is currently a fugitive.
The conspiracy and wire fraud counts in the indictment carry a maximum potential penalty of 20 years in prison and $250,000 fine, or twice the gross gain or loss from the offense.
The securities fraud count carries a potential penalty of 20 years in prison and a $5 million fine. Sentencing is scheduled for Aug. 1, 2023.